Public Policy and the Lottery


A lottery is a gambling game in which numbers are drawn for prizes. The winnings can be substantial, and the profits are usually used for public purposes. A percentage of the proceeds is often donated to charity. Lotteries are popular around the world and have long been an important source of revenue for government and private enterprises. They are also a source of controversy and debate. Critics point to their potential for abuse, particularly with regard to the promotion of the lottery by slick advertising campaigns that often mislead consumers about odds and prize payments. They also criticize the regressive impact of lottery play on lower-income people.

The earliest lottery tickets were found in China during the 205–187 BC Chinese Han Dynasty and were likely to have helped finance major government projects. The first European public lotteries in the modern sense of the word were probably venturas, which were held from 1520 to 1744 in Burgundy and Flanders by towns attempting to raise money for defence or poverty relief. They may have been influenced by lottery games held in Italy at the court of the d’Este family. Lotteries spread to colonial America, and by 1776 a number of state and privately operated lotteries operated in each of the 13 colonies. They were a vital part of the financing for roads, bridges, canals, colleges, hospitals and churches. Benjamin Franklin sponsored a lottery to raise funds for cannons to defend Philadelphia against the British. Thomas Jefferson attempted to hold a private lottery to relieve his crushing debts, but it was unsuccessful.

Among the reasons for state governments’ adoption of lotteries in the post-World War II era was that they provided an alternative to raising taxes, which could be politically unpopular. But this argument obscures the fact that most lottery revenues come from a core player base that is disproportionately low-income, less educated, nonwhite and male. It is a player base that buys multiple tickets on a regular basis, and spends a significant share of their incomes playing the lottery.

As a result, lottery officials often operate in the blind spot of broader public policy, and have no meaningful way to influence or shape state policies on gambling or public welfare. The industry is a classic example of a form of public policy that is created piecemeal and incrementally, with few if any broad-based reviews or decisions. As a result, the industry has evolved in ways that have created public policy problems and dependencies that may be difficult to undo. Moreover, public officials inherit these policies and dependencies when they take office, so the development of lottery policy is often at cross-purposes with the wider public interest. This dynamic also applies to other forms of gambling, such as casinos and racetracks. As these industries have evolved, they have created their own problems and dependencies, which are at cross-purposes with the broader public interest. This is a problem that has been exacerbated by the proliferation of online gambling.